Big surprise. Everything that has come from this industry has been at best broad guesstimates, at worst intentionally spread lies. Trying to explain the demise of an obsolete business model without taking the obvious into account is hard!

Classic coup de grâce in the article: "Like I said: as far as I'm concerned, everything from this industry is false, until proven otherwise." Why are industry statistics still endlessly repeated in the media? It makes you wonder what market the newspapers using these fabricated stats are aiming for, because the majority of filesharers would laugh into their porridge at the thought of buying every film, track and OS they downloaded!

Oh, indeed. But this particular industry has been putting out nothing but misleading statistics for decades, now, and the policy reports they end up in have produced some of the worst laws ever written, ultimately preventing large numbers of people from doing perfectly legitimate things with products they have bought and paid for.

Now there's a risk that the media industry's lies are going to result in yet another round of laws that further restrict the freedom of law-abiding people, while still doing nothi

Of course, by making up unlikely numbers they divert attention from the even more insidious propaganda buried in the claim.

It's not money _lost_, it's money _saved_.

Downloading _saves_ the economy £120 Billion.

The money that doesn't get spent on media doesn't magically disappear. It's spent on other things instead. Jobs aren't lost, in fact, I'd wager the money saved creates more jobs in the local economy than money to the media industry which to a large extent doesn't go towards labour intensive activity, and in many cases simply goes out of the country.

Does he get the bus everyday? If you take a bus almost every day, and then one day you decide to walk instead - it would make sense to talk about the money you saved during those times you decided against taking it.

Of course, I'm not surprised that the RIAA twist the truth, but to hear Government advisers [bbc.co.uk] falling for the fallacy? Either they are ignorant of basic economics, or they are intentionally being deceitful on economic matters. Either way, it's no wonder the economy is going down the tubes.

Except, off cause, that the study were referenced wrong in the press releases. From TFA:

Oh, but the figures were wrong: it was actually 473m items and Â£12bn (so the item value was still Â£25) but the wrong figures were in the original executive summary, and the press release. They changed them quietly, after the errors were pointed out by a BBC journalist.

When asked why they did not take steps to notify journalists of the error, they first tried to avoid answering, but they

...explained something about how they couldn't be held responsible for lazy journalism, then, bizarrely, after 10 minutes, tried to tell me retrospectively that the call was off the record,

Imagine you've a city of 100,000 or so where 90% of people earn their money working at a massive copper or supplying that copper mine. Imagine demand for copper falls by half and they have to cut production (and jobs) by half to remain profitable.

In terms of GDP copper mining may be something like 0.1% and it wouldn't seem like that would have a huge effect if it went down to 0.05% of GDP.

The movie Dark knight cost about 185 million to make and took in a total revenue of over 1billion. Thats more than five times the original investment. Iron Man cost 140 million and made over 500 million. Transformers cost 151 million and made over 700 million. The list goes on.

That does not look like a demise of an industry to me. That looks like bloody good business. You can find similar statistics for music, however its somewhat harder to do. For example black eyed peas "Monkey Business" sold about 300k copies in its first week alone.

indeed. its money for old rope. Absolutely everyone who produces entertianment content is a millioanire and lives in a gold plated house.No movie, game or tv show ever lost money, and we are all just pretendind that piracy costs people jobs.In fact, the absolute guarntee of a 500% ROI is a genuine fact, despite the fact that this is in complete contravention of basic high school economics, because if it were true, you, and every other slashdotter would be falling over themselves to start up movie studios.

Trying to explain the demise of an obsolete business model without taking the obvious into account is hard!

You could start by explaining what alternative you propose, if the current model is "obsolete" and its flaws are "obvious".

You can certainly criticise some of the current pricing, aggressive legal strategies and industry propaganda. However, you can't deny that ultimately, it does cost a lot of money to make movies, software, etc., and that some of these products are valued by a lot of people. Moreover, there has to be some return on investment for those who back the successful projects, because a lot of the others make big losses, and no-one would back a new project if the best it was going to do was break even. This is basic economics, and the fact that the marginal cost of distributing a work can be close to zero in the Internet age is not the whole equation.

If the *AA's want absolution for pretending distribution costs real money, they're going to have to give absolution for the kids pretending production doesn't.

Or, alternatively, we could just ignore them all, both crowds, and have sane conversations premised on observable fact: production costs real money and entails corporate-level risk, and distribution is, on that scale, virtually free. Somewhere in here everyone's going to have to settle on a business model where the people who do the valuable work (t

Full article is posted on Ben's blog at http://www.badscience.net/2009/06/home-taping-didnt-kill-music/ (sorry Ben for the slashdotting) - the guardian tends to remove bits of his writing in print/on their website (for space reasons I assume).

There's several videos floating around with him too that are definitely worth watching [youtube.com]. He is a very sharp mind and it pleases me greatly to see his urgently needed skeptical analysis getting the press coverage it so thoroughly deserves.

He does not state that there is a causal relationship, he links to a study showing that there is a correlation and says that in light of this he doubts that it can be shown that every download is lost revenue. The onus of proof is surely on the person who is making the statement, not the one doubting its veracity, and showing data at best inconsistent with the hypothesis that each download is lost revenue.

How perfectly ridiculous! Every bit in a binary number has a weight. Furthermore, every bit you add doubles the weight, so while a single zero or one may only weigh a little bit, every one you add to that will weigh a bit more. It's very easy to see how these sorts of things could add up.

Assuming only 1k electrons in a bit, then a bit would be 9.10938215(45)x10^-28 kg.
If we then assume that every p2p user downloads at 100kbps, then in 1 second a single user would have acquired 9.10938215(45)x10^-23 kg
Assuming there are only 1 billion users in one second 9.10938215(45)x10^-15 kg worth of data would be transfered
After approximately 317 years only 9.10938215(45)x10^-5 kg worth of data would have been transfered

* Provide strategic, independent and evidence-based advice to Government on intellectual property policy, covering all types of intellectual property rights

It could start by procuring some actual scientific evidence around the economic effects of intellectual 'property'. Research, comparisons, even simulations of various forms of models of systems would be nice. There is plenty of evidence that intellectual 'property' is, in

I just read TFA in the paper (yeah, i'll hand my geek card in on the way out...) and it struck me that the most important thing that he doesn't mention is that there's no evidence that anyone downloading a pirate copy of anything would actually buy it if they couldn't download it for free. Therefore nothing is actually lost.

My guess is that 99% of the stuff "illegally" downloaded would never actually be bought if it wasn't there to download.

I just read TFA in the paper (yeah, i'll hand my geek card in on the way out...) and it struck me that the most important thing that he doesn't mention is that there's no evidence that anyone downloading a pirate copy of anything would actually buy it if they couldn't download it for free. Therefore nothing is actually lost.

I don't know. I have hundreds of CDs and enjoy having a CD collection, but these days I prefer to just download whatever I want to listen to and use the money I've saved on other things

The comments to TFA (I guess I'm not a real./er either) include links to a properly rigorous academic study (and some news articles) that shows that downloaders spend more money, not less: for every CD downloaded, they buy 0.4 additional CDs. The study's authors also "find evidence that purchases of other forms of entertainment such as cinema and concert tickets, and video games tend to increase with music purchases."

That study successfully showed that people who download a lot also buy a lot (presumably because of their high interest in music). But, it doesn't really answer the question we all want to know- "In the absence of filesharing, would these people have bought more or less music than they did?"

Someone needs to do a randomized test where they take N music consumers and split them into two groups: one that gets a $20 allowance (no strings attached), and another that gets a $20 allowance contingent on an enforc

Someone needs to do a randomized test where they take N music consumers and split them into two groups: one that gets a $20 allowance (no strings attached), and another that gets a $20 allowance contingent on an enforceable pledge not to download music. Perhaps they could even expand the pledge a bit to disguise the intention of the study... At the end of a period of time, count up the value of purchases made, and tell us whether there was a statistically different measurement.

I'd be more intersted in this study if Apple hadn't sold >100 million songs on iTunes.

Then again, I work with something like 20 people who all make good money and all know how to go find stuff (music, movies, games, etc) and 'consume' it rather easily. Of those 20, only one I know does it because he's actively trying not to spend money.

I'm already convinced by my anecdotal experience and the utter and complete lack of proof of the alledged damages being done. It's hard to take the RIAA seriously when t

Or maybe, people who download are naturally people with an interest in music/movies/games and would spend more on these things anyway? Perhaps if they did a comparison between movie lovers who download movies and those who don't it would be a fair study.

Someone who downloads a lot of movies/games/music is someone with an active interest. You are comparing a randomised sample (general population of buyers) to the spending habbits of a relatively non random, selective population. If the study was carried out

Yes, but since there's no way of knowing how much was actually illegal material in the first place, we have no way of knowing how to weight that remaining 1%. Since there are non-zero legal downloads (no matter how few), the real figure must be strictly less than this by an unquantifiable amount.

Yes, that's correct. Which means in "corporate speak" there would be a %1 increase in sales if there aren't downloads available. Which is why the companies want downloading to stop. Even the %1 is a pretty hefty sum of money.

I know I for one am like that. I'll download an album from a band because a friend said they were good, but I wouldn't buy it. I'll download a ton of T.V. shows, but I'd just watch them on cable when they were on, or heaven forbid use a VCR to record the shows so I can watch them when I want. How about the porn industry too? How many people download a 4GB movie only to find out they don't like it and download something else? They probably would be much much less likely to buy because they would have to eith

Exactly. The only sensible solution is to make it all really cheap and DRM-free. That way people can share it - which encourages people to buy stuff as soon as it's available so they can be first to share the latest cool stuff with their mates.

That's the issue, you download a 4gb movie and find that you don't like it, so you delete it.They would rather you bought it, thus wasting your money before you realized it's crap. They also don't like the fact that modern communications such as the internet and sms messages allow people to spread the word about a lousy movie.

They also conveniently don't take into account the sales they receive when someone actually likes what they've downloaded enough to go buy the CD/DVD/Whatever. It's all a black pity hole of lost sales...

Not to mention those of us that have actually found new shows and bought them thanks to P2P. For example, in the late 90s I hear all this buzz about this new show that is a remake of a bad movie I had seen called Buffy The Vampire Slayer. Supposedly unlike the movie this was actually really good, with good acting and storytelling. But where I lived there was no WB to be had.

So I downloaded a couple of episodes to see if it was any good. I actually enjoyed them and I ended up buying the entire Joss Whedon collection, including the Angel series and Firefly. At $50 a season, for the seven seasons of Buffy, Five of Angel, and one of Firefly you are looking at $650, not including a few collectibles and various promo stuff from the shows that my late sister bought me. All told probably close to $1000 was spent on a show that I never would have bought if it wasn't for P2P, because after seeing the movie I honestly didn't see how they could make it not suck.

I'm sure there are plenty like me, that are happy to buy something we enjoy if we are given fair value, and who for one reason or another don't have access to many of these shows or other entertainment. If I would have saw Buffy the Vampire Slayer boxed sets in a B&M store I never would have given it a second thought if I hadn't gotten to see a couple of episodes on P2P. After all, who would have thought any series based on a Kristie Swanson movie could actually be entertaining?

I downloaded the first season of Smallville about four or five seasons in, not having watched TV since about the end of middle school, watched it straight through on one of my days off, and went to FYE the next day, hit a Buy one get one DVD box sets sale and bought all the seasons that were out on DVD at the time. And while I was there, I picked up Hogan's Heroes, Knight Rider, A-Team, and a stack of others that I can't even remember now, as it was a few years ago. And spent $25 on their savings card, got

And there I was thinking it was the credit crunch that has caused our economic problems, it's obvious now that the real problem are the millions of teenage girls downloading britney spears albums (or who ever is in at the moment).

So they added up all the bittorent users, multiplied the figure by 25, and assumed that was the total cost to the economy.

I'm sure the Blender team would LOVE to receive 25 pounds ($40) for every download of each and every one of their movies. Ms. Boyle would doubtless be substantially richer if she were given the same for every person who had ever downloaded (or watched on YouTube) a clip of her singing. More members of Ubuntu might be able to play space tourist if each and every file (whether it be a CD, DVD or just a patch) resulted in a $40 donation. Radiohead and Nine Inch Nails would be over the moon if each individual song they've released for free got them that in checks received via fan mail.

I'm not saying that all the legit material added together make a substantial chunk of the corrected figure, but rather that the researchers never bothered to consider the fact that the material is not of equal value and that some items have a value of zero. They assumed everything was illegal and everything had identical worth.

That goes beyond Bad Science. How many of you, in elementary/primary school, got taught algebra by being given shopping lists? Pretty much everyone? Good. It would be a pointless exercise if apples and oranges had the same price ($40 each), so we can assume your class used different prices for different object, right? Right. So. Hands up who can tell me what you could do then that these researchers didn't do now?

Actually, they added up all the bittorrent users on one file in the afternoon, waved some magic fairly dust to extrapolate that to everyone for a year, multiplied the figure by Â£25 as the 'average' price per file, and then multipled *that* figure by 10 (from Â£12 billion to Â£120 billion) in the press release by accident, then quietly changed it when challenged by a BBC reporter. Not that they issued a retraction.

It's such a useless figure for anything it's laughable. Well, apart from whipping up a moral panic in the government so they pass yet more draconian legislation forcing ISPs to act as some sort of panopticon against their own userbase at their own cost. I'm sure it's pretty good at that.

More than seven million Britons use illegal downloading sites that keep billions of pounds circulating inside the British economy rather than being sent overseas to US media companies or obscure tax havens, despite almost everything on offer being appalling rubbish no sane person would pay a penny for, according to unnamed researchers copying a passing number found in a 2004 press release [today.com] from music industry lawyers trying to drum up business.

Intellectual Property Minister David Lammy said the report brought home the impact illegal downloads had on the UK economy as a whole. "If we take as read the music industry's assumption that every download is a lost sale, then billions of pounds are freed up for ordinary people to spend of things of actual economic substance to keep local businesses healthy, rather than chasing phantom pseudo-value from things that have an inherent cost of production of zero. This makes the whole economy more efficient and lets money go where it is actually useful, rather than to Bono's numbered account in the Virgin Islands."

The government says it will be hard to change attitudes to free downloading, particularly from the entrenched old media parasites. "Studies consistently show that downloaders buy more music. We have to stop this and get them downloading dodgy rips from BitTorrent, rather than official high-quality versions from iTunes."

The report also noted that new, faster broadband services could increase file-sharing, which was already more than half of net traffic in the UK. The ISPs modestly declined credit for their part in helping Britain's financial future, noting that it was their customers, the great British public, who had voted with their browsers to do the hard work of keeping the country afloat.

Nicely done, except that music doesn't - and movies most certainly don't - have "an inherent cost of production of zero". Sharing cannot be wrong, and kicking the old media gatekeepers out of the arena cannot happen hard enough or fast enough, but there needs to be some way to share the cost as well as the benefit of the things we love to download for free.

But getting people to pay for CDs was a way of recouping studio costs, and the cost of sustaining the artist while they were creating the music - plus a little towards the relatively low (economic) cost of mass-producing CDs. Now that there is no reason for people to buy CDs, some other means has to be found to keep artists alive while they create, or just accept that the era of the professional musician is over.

With today's technology advances the actual costs needed to produce an album are approaching zero as well; the rest of the supported costs, release parties, free samples, payola, other marketing, free blow to the execs, etc, are not necessary for producing the product and would not occur in a competitive market.

I acknowledge the meaning of "professional" as you are using it, but I simply meant someone who earns their living as a musician. I am well aware that many musicians who take their work seriously, probably most of the ones whose music I love, earn very little from it - and we all know that a lot who are paid well produce little of lasting worth. This is why generally musicians don't seem overly bothered about the digital revolution, as it presents little threat to their non-existent livelihood. In fact many

So, the first number was off by a factor of ten, not counting the silly estimate of 25 Pounds when even 2.5 Pounds was doubtless too much - meaning that the original number was off by at least a factor of one hundred.

Still nothing compared to what government and government-related groups can come up with to scare people. Anyone remember how we were all told in the '80s that 1.5 million children were kidnapped each year in the United States, when the real relevant figure (kidnappings by strangers) was closer to 150? That was off by a factor of 10,000.

And how about those Weapons of Mass Destruction in Iraq? We're going to find them any day now.

Yes, what this proves to us once again is that as bad and unethical as industry can be, they still can't compete with government and the do-gooders.

True observation, but the *AA companies are a part of the propaganda arm of the big scary government, just as the big weapons manufacturers are a part of the war machine of the same government. They are not "better" or "worse", they are the same thing;)

Goldacre could have strengthened his analysis even further by considering the decline in entertainment industry revenue due to competition: not from downloads, but from social change. My parent's generation had no money and few options so they spent a lot of their spare time playing cards and reading books from the public library. In my day, a whole culture had developed around vinyl records, and they were the catalyst for most of a young person's social life. These days, young people spend roughly the same

According to the article, the "lost income" from a downloaded movie is about £.40 (the rental price of the movie), which seems a bit high - a postal video-rental account at tesco or lovefilm costs about £1.50 per DVD rented (plus they're spending £0.50 of bandwidth to download it, which is money going into the British economy and supporting the government's broadband strategy).

However, these figures (assisted by the assumption that every file downloaded from a "file-sharing site" is a co

"Lies, damn lies and statistics". "Don't trust statistics you didn't forge yourself". "70% of statistics are made up, 80% of all people know that".

And so on.

There's a reason for those jokes, and it's shoddy statistics. Often, it's not even malice, it's simple inaptness. Ok, far too often it's also malice. Numbers are just too impressive, and they have authority. People believe them. They are regarded as "hard facts". They are not "a lot", they're not "a few", they are a million, a billion, and so on.

Funny about it is, though, that people believe those statistics. Not much differently than they believe the fuzzy "a few" and "a lot" statements. Because they're unable to test them. Even if it is as easy to throw the "numbers" out the window as in this example. 25 pounds "damage" per infringment. Nuts? 25 pounds ain't even what a current blockbuster costs when you buy it on DVD (legally, ok? Not talking about those flying Chinese traders where you know you're buying a bootleg copy). But did anyone care to check?

Probably no. It was numbers. It was hard facts. Hey, they wouldn't dare to release information like this if they didn't fact check, do they?

Heh. It was printed in the SUN. Dunno about you, but I've made up my mind about the fact checking abilities of their reporters...

Anyway. It does hurt to see my original trade being abused that way. I'm a statistician, at least according to my degree. I was, and still am, fascinated with the ability to aggregate a whole lot of samples into a simple, understandable statement. Statistics can serve a valuable purpose if, and only if, they are used sensibly and earnestly. And NOT "creatively".

So here's a little guide how to use statistics and how to gauge their credibility:

If you don't get to see the sample or don't get any information about how the sample was gathered, throw it to the dump. I can easily "prove" that every single listener to music buys it and that no copying is going on if I pick my sample "right". It's easy to "prove" every computer gamer is a potential addict if I only look at people playing 10+ hours a day. If you don't get told what's the source of the data and what data they worked with, chances are good that the whole deal is rigged.

If it's a "voluntary", "opt-in" sample, throw it out. All those statistics based on online questionaires where people can sign up and go to to fill out forms if they're "interested enough" are worthless. You'll get samples filled out by people who have a strong opinion about the subject already. When there is an online questionaire regarding "too much internet use", what kind of answers do you expect to get? Worse, what kind of people do you think will participate at all? It's a rigged sample from the start.

If you don't get to see the sample size, throw it out. The sample size gives you a fairly good idea how much of an error you may expect. 1/N^2 is a good rule of thumb (with N being the sample size) for the statistical error. That doesn't mean that a small sample automatically leads to a huge error margin, 200 samples may be already good enough if they are picked well, and if they're not "hand picked" (see above).

If you don't get to see a mean, a median and a standard deviation, throw it out. It's easy to prove that everyone's doing quite fine on average, even in this economy, because on average everyone has enough money to live well. The mean says so (the "average"). Without standard deviation, you won't get to see that the average is nothing but an artificial number that has no reflection in reality. It's not that everyone has the average, there's some who have a TON more and many that have a LOT less. The median would easily tell you so (that's the "middle number" of the sample). Comparing mean ("average") and median ("middle") tells you a lot about whether your sample was homogenous or whether you have a few VERY different bits in the sample (which should have been cut from the stati

No, the pound coin in its current form hasn't been around for more than a few decades. But the pound as a monetary unit is more than a thousand years old and did indeed represent the value of one pound of silver. The first coin to to be worth this much was, afaik, the Sovereign which was introduced in the late fifteenth century.

If pound coins actually weighed a pound, everyone would have to go to the gym just to be able to carry enough money to buy a few beers

Originally (way back in the middle ages or something) a pound was the value of a pound of silver. Because pounds of silver were a bit heavy to carry around, they made them gold coins. The connection with the weight was definitely there, though. (It's devalued a bit since then, I'm afraid.)

- To get a decent bearer for the media
- Decent artwork, info
- To get more after getting interested
- To support the artist as well-made choice after checking out the art
Yes, I am not of the ipod-generation.

I would so much rather support the artist by direct remuneration, i.e. donating to them through PayPal or something, than spend money on CD's that I don't use, that cost resources to produce, that just end up piling in the corners, and that are useless in a few decades. I can get the audio through a torrent service anyway, all without the shipping of cargo loads of plastic discs from overseas. Regrettably few artists provide for this, so I try to support my favourite bands by buying their t-shirts and other

Depending on where you are in the world shit can be quite easily acquired. For instance here in Denmark it is quite expensive to keep it around since there all sorts of rules and regulations, so the farmers in Jutland are more than happy to give shit away for free - so his analogy is one of the more insightful I've read around here in a long time.

Citation needed. Internet access isn't infinitely fast, and a lot of providers have transfer caps per month in addition to per second. In some places, you can't even fill an 8 GB iPod in a month without running into prohibitive overage fees.

The Guardian tends to edit his pieces a bit when they put them up. If you look at his blog post on badscience.net containing the original version you'll see that sentence links to another Guardian piece about a study showing that people who download more also buy more music - he's quoting from that rather than making it up...http://www.badscience.net/2009/06/home-taping-didnt-kill-music/ has the original and you'll see it links to http://www.guardian.co.uk/music/2009/apr/21/study-finds-pirates-buy-more-music

People who illegally share music files online are also big spenders on legal music downloads, research suggests. Digital music research firm The Leading Question found that they spent four and a half times more on paid-for music downloads than average fans.

The article is full of vague numbers and statistics. It's just manipulation of numbers to prove a point

"The study found that regular downloaders of unlicensed music spent an average of Â£5.52 a month on legal digital music. This compares to just Â£1.27 spent by other music fans. What other music fans? The one's with dial-up connections? Who then? You can't compare apples to oranges.

http://www.guardian.co.uk/music/2009/apr/21/study-finds-pirates-buy-more-music (linked form the original version on Ben Goldacre's blog)

I actually feel guilty for buying physical product, though, when most of the cost won't even go to the artist, and all it will do is sit on a shelf. (Here's an ancient blog post of mine [blogspot.com] about this.) I'd rather make a direct donation to the artist, but many artist sites still don't have provision for this.

Music is my number one hobby and I download a hell of a lot of it on BitTorrent - but only because I consider £10 to be a perfectly reasonable price for a great album but a total rip-off for a bad one. In reality, because I listen mostly to classic rock and blues music and buy new or secondhand on line, I probably pay an average of £5-£6 for a CD.

However, with that said, I own somewhere in the region of 1500 music CDs and with that size of collection, if something I download is crap then I

Although I agree with his point, Ben Goldacre also makes up some facts, like this one "...for example, people who download more also buy more music." I would have to disagree, after all if I can get the music for free, why would anyone ever pay?

Let's see what you're saying.

You're saying that a particular factual claim, "downloaders buy more", is made up.

Your argument is "I disagree", and a theoretical explanation of why.

Your position would have been much more well-argued (and thus credible) if you had provided factual observations, i.e. evidence, to back up your theoretical assertion.

A sibling poster has linked to evidence for Goldacre's position. Read it and make up your own mind.

A $100 bill actually worth $100 dollars, though. That is to say, that I can trade a $100 bill to someone for $100 worth of goods. I can't do that with an mp3 file, it has essentially no resale value in my hands.